Shank: Tax increase has done nothing for Maryland's economy

June 27, 2009

To the editor:

What does the State of Maryland have to show for the largest tax increase in Maryland's history in 2007? Our unemployment is skyrocketing, we face deficits through 2014 and Marylanders are leaving the state in droves. The state's structural deficit is $1.2 billion and growing - every bit as large as it was prior to the passage of the special session tax increase. Spending increases year after year. This state's oppressive tax burden hasn't solved our massive deficits, and is instead wrecking our economy.

The nonpartisan Tax Foundation has ranked Maryland as the fifth worst state in the nation in which to do business. What message does this send to firms thinking of locating here? Small businesses are hurting, and their government is making it worse.

Maryland Comptroller Peter Franchot recently reported one-third of Marylanders making more than $1 million have left the state. This news comes a little over a year after Gov. Martin O'Malley and the Democratic leadership in the General Assembly pushed through the so-called "Millionaire's Tax." California, New York and New Jersey have all tried this policy, with similar results - punitive taxes force people out of a state.

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What too many in Annapolis don't understand is people and businesses will leave if the tax burden becomes oppressive. According to economist Arthur Laffer, who recently wrote in the Wall Street Journal, between 1998 and 2007, more than 1,100 people every day, including Sundays and holidays, moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio, and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas.

As a consequence of our tax policies, April revenue collections are down by more than $100 million. As the Wall Street Journal points out, as these individuals flee, who is left to pay the burden of the oppressive tax burden in our state - the middle class. Maryland's government cannot expect its citizens to pay oppressive taxes while spending continues to increase unabated. As Ronald Reagan put it so well, "The problem is not that people are taxed too little, the problem is that government spends too much."

Just a month ago, Marylanders turned out by the thousands at Tax Day Tea Parties to oppose the overtaxation and wasteful spending. First, the liberal media derided the movement; next, they ridiculed it; now, they are scared by it. The anti-tax and spending wave across the country has only grown stronger since then. Just last month, California voters soundly rejected a series of propositions aimed at increasing taxes, and dealt a significant blow to their entrenched spend-and-tax leadership.

Unfortunately, our state constitution prevents us from bringing budget items to the ballot. However, we do have the option to oust those officials who perpetuate the cycle of fiscal irresponsibility and predatory taxation. Whether it is voting for tax increases outright or supporting ever-expanding state spending, voters must make it clear the status quo is no longer acceptable. Enough is enough. It's time for the people to take back their state.